Mail delivery faces axe

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New Zealand Post is proposing to reduce mail delivery to as little as three days a week to cope with falling volumes.

Communications Minister Amy Adams today released a proposal from the state postal service. It had told her that ''it considers changes are needed to ensure a sustainable postal service in the 21st Century''.

As well as cutting the number of days mail is delivered to a minimum of three days a week, the proposal included introducing more self-service kiosks.

''During the last 10 years mail volumes have dropped considerably, with 265 million fewer items being posted each year compared to 2002. Within five years, mail volumes are forecast to be nearly half what they were in 2002,'' Adams said.

''In light of those significant reductions in mail volume, New Zealand Post is seeking to make changes to the Universal Service Obligations it is bound by.''

Adams said the changes would require Government approval and public feedback would be sought.

"In deciding whether to accept or reject the proposal or seek to negotiate a compromise, I will look to balance the interests of postal users with the need to ensure a financially-viable postal service."

Minimum service requirements for New Zealand Post are set out in the deed of understanding it signed with the Crown in 1998. The deed has not been significantly reviewed since it was signed, Adams said.

New Zealand Post said its last deed was signed before ''the digital revolution'' which had led to an unprecedented drop in mail volumes.

'That revolution has resulted in the rapid expansion of internet-based products and services which have fundamentally changed the way people communicate, do business and shop,'' the state owned enterprise said in a statement.

''There was 24 per cent less mail posted in 2012 than a decade before in 2002. Within five years mail volumes are forecast to decline further, to just over 600 million items.''

Chief executive Brian Roche said the current deed was in ''urgent need of a revamp'' to ensure its services remained sustainable.

"The time is now to make the necessary decisions for the future. Every postal system around the world is facing similar challenges and they are beginning to act. We cannot stand still and simply hope the problems will go away.

"We are seeking an agreement that gives us the flexibility and certainty to be able to plan for that future. Without that flexibility, standard letter mail and postal outlet services will incur significant losses," Roche said.

"Not gaining flexibility will leave us with some challenging and unsustainable options - asking for taxpayer funded subsidies to prop up the letters business; operating the postal business at a loss which will degrade the business over time; or cross-subsidising from other parts of New Zealand Post, denying the business the opportunity to grow and invest."